01/19/2012 04:27 pm ET Updated Mar 20, 2012

Smaller Is Better: New Models for the Indie Film Market

By: Noah Nelson

All eyes are on Park City this week as the 2012 Sundance Film Festival gets underway. In the midst of the snow and stars scores of films will be screened, many looking to get picked up for distribution after an arduous road to the festival. In an earlier era hot buzz at the festival led to multi-million dollar bidding wars. But in this age of Netflix, Video On Demand, and recessionary caution those deals are thought to be a thing of the past.

Yet all is not doom and gloom in the indie world. The uncertainty of the movie market goes a long way towards leveling the playing field between independent producers and their big studio counterparts. While an indie film can't hope to compete with a major release in terms of P&A (prints and advertising), there are market forces at play that will eliminate half that equation, and mounting evidence that for the right movie theater, an independent film can be just as profitable as a blockbuster release.

"The only place for indie film to go is up, honestly," says Jonathan Poritsky, writer of the The Candler Blog, which focuses on film theory and criticism.

At the end of 2011, Poritsky conducted an interesting thought experiment. He took the results from Box Office Mojo's year to date rankings of ticket sales and calculated what the per-screen averages were . This altered perspective crowned Kevin Smith's "Red State" as the number one movie of the year with a reported per-screen average of $220,936. (A figure made possible by an incredibly low screen count and an inflated ticket price thanks to Smith's road show format which included Q&A's with himself and cast members after each screening).

More vital to the health of the independent film market is the data on established directors like Terrence Malik and Werner Herzog, whose releases this year leap up the charts when viewed from this perspective, as opposed to raw box office grosses. (From a mark of 125 to 12 for Malick's The Tree of Life and 147 to 23 for Herzog's Cave of Forgotten Dreams.) The comparison of successful per-screen averages on indie films is apples to oranges, because to the overall downturn in the box office for the year, 2011 was the weakest box office year since 1995. But Poritsky's formula does raise an interesting question. Why should these small movies be doing so well when the market as a whole is down?

"I just think audiences are getting tired of what is at the multiplex," says Poritsky. "They're tired of paying so much to see a lot of the same movies."

Which is leading adventurous audiences out to new venues. There's been a resurgence of the art house in the past decade, with a new model emerging: that of the non-profit movie theater.

"There's a paucity of screens for independent cinema." says Hadrian Belove, the head programmer of the Cinefamily at the Silent Movie Theatre, Los Angeles' most high profile non-profit screen. The Cinefamily made a name for itself thanks to Belove's embrace of the strange, overlooked parts of film history. Their annual "Everything Is Festival,"  held over the July 4th weekend, is a massive celebration of the most gonzo-filmed entertainment possible. Nevertheless the mission of the Cinefamily has evolved.

"We're only four years old and our goals have changed a lot. Our roles have changed. In the early days I thought of ourselves more as a cinematheque and maybe we had some interest in occasionally showcasing a new film to highlight it, in a buzzmaking fashion. But I've become more interested in filling what I see as a huge lacuna."

Nor is a space like Cinefamily beholden to the old distribution models anymore. Case in point: Kill List, the British genre film (read our review) that made the festival rounds last year to a fair amount of acclaim. While Kill List is available on VOD right now, the theater will be screening the picture next month, a scenario that a few years ago wouldn't be thought to be commercially viable.

"In some ways I'm glad that it will have been on VOD for a little while," says Belove, "because VOD is a finite format that has some popularity. Enough to perhaps be -- to me -- the equivalent of buzz-making screenings. I don't actually know anybody who uses VOD. Obviously some people do or it wouldn't exist and wouldn't be as profitable as it is."

Another example is the Wall Street crisis film Margin Call, which managed to earn over $4 million on VOD while simultaneously racking up $5.1 million at the box office late last year. Nor is Kill List the only film this year following the lead-on-VOD formula. Another is Detachment, the latest film from Tony Kaye, director of American History X. The film featured a murderers row of actors led by Oscar winner Adrien Brody and will bow to VOD before entering theaters this March.

On Demand isn't the only change that digital technology is bringing to the distribution game. Multiplexes have been making the shift over to digital projection for years now thanks to pressure from the studios and the efforts of the National Association of Theater Owners. As Poritsky points out, the small theaters are facing some of the same pressure. It is up to the distributors to decide which films they will make available via physical, 35mm prints, the "P" in "P&A," and a not insignificant cost in the filmmaking process.

Independant theaters that don't make the leap to digital may get left out of the loop by films that are only released in digital format.

"The transition has to happen for theaters that haven't done it yet," says Poritsky. "That's sad and we're going to miss film and all that. But eventually that means the pipe to get to everywhere is now in place."

Which is the upside to a digitally enabled indie marketplace. In a world where film prints are no longer a factor, the cost of distributing an indie film is lowered dramatically. Theaters large and small can adjust schedules almost on the fly and the possibility exists for a surprising success to reach more theaters without taking on the massive financial risk of striking prints and shipping them.

Profit, after all, is made out on the margins. Blockbuster budgets require blockbuster successes, and after thirty years of market dominance, big movies are less and less of an event and more just the status quo. There's money to be made in the gaps in the market -- those lacunas Cinefamily's Belove speaks of. It just might not be the kind of money that attracts the studios.

"People can make hundreds of thousands of dollars, but maybe not millions, and that's the problem," says Poritsky. "The studios and the movie business operates around millions. But I think there are a lot of filmmakers who could do a lot of good work for less than that."

Originally published on
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